tv Charlie Rose PBS July 26, 2013 12:00am-1:01am PDT
telhami. >> rose: welcome to the program. we begin this evening with a look at secretary kerry's peace initiative in the mirld east, joining me, ziad asali, dennis ross, and shibley telhami. >> this issue as sthibly says is the ultimate conflict in the world and it is exceptionally important to the arabs and muslim to have it resolved. so i think the mere fact of bringing the partisan negotiations will buy time for the united states and all the parties, so that the other outstanding burning presence, violent issues in several countries in the region will be easier to handle if this at least there is this appearance or more than appearance, a real attempt at resolving this issue. >> rose: and then we turn to china, a new business enterprise, joining me, bruno wu and tom middelhoff, the company is bt capital, we talk about
doing business in china. >> china is in the phase of going through a major social transformation. no matter what people actually do have access to actually all kind of information, and the, i agree transparency will bring better understanding among the people, but it is going to take time. it is going to take time for the world to understand china is going to take time for ordinary chinese citizens to be able to better comprehend all the information, so i think in the next five to ten years, we will see the situation becoming more and more integrated with the rest of the world's information flow. >> rose: the middle east and business in china when we continue. funding for charlie rose was provided by the following.
u.s. secretary of state john kerry has made several trips to the region this year, last week he announced israeli-palestinian peace negotiations would resume, no talks have taken place in the last three years. details of the negotiations are vague. the response in the region and elsewhere has so far been mixed, some have questioned secretary kerry's timing given the ongoing turbulence in syria and he gymnastics. >> former u.s. envoy to the middle east, dennis ross and from washington,. >> a sally. >> and joined by shibley telhami he is a professor at the university of maryland and the author of this book, the world through arab eyes, and the reshaping of the middle east, and we begin with dennis ross, dennis, tell me about what you think and what you think about what we will call the kerry initiative. >> well, i think it bears looking at the reality that he
has taken six trips to the middle east. he has taken his time. he sought to build a relationship with both president netanyahu and president abbas. he has worked to ensure that there is -- there are discussions that are very well protect sod that each side can have confidence in him. i think he has tried to develop a degree of understanding between the two of them amount what he will do. i think also that he has focused very heavily on trying to get them to agree to a basis that is sufficiently strong that they will stay at the table. he is also focused, i think, heavily on trying to get each of them to make sure that they will adopt certain kinds of steps of avoid certain kind of steps that would plikt the circumstances for negotiation. he has taken his time, in other words and i think he has been wise to do that. both sides i think at this point go in not having necessarily a high level of confidence they can achieve an agreement but a pretty high level of confidence
in him that this is going to be a serious exercise, number one, that they need to stay at the table for an extended period of time, number 2, and that they each need to avoid the kinds of steps that would deny the other political space and the capability to make decisions. so i think he has set the ground for these negotiations and he has done about as well as he could have. >> rose: and to his credit and to my disappointment, he is not doing interviews so he is not out there talking about what he is doing and trying to do. >> absolutely. and i think one of the reasons for that is, and i can say this from long personal history in this, every time you force either side to have to defend positions prematurely, you trigger all sorts of political backlash against them. you make it difficult for them to proceed, what he is trying to do is protect the space in which they can operate, avoid putting them in positions where they have to prematurely adopt positions that would make it very difficult for either one to proceed. >> rose: what do you know and what is your own assessment from
the palestinian side? >> i think there is a tendency on the palestinian side to be jaded and to have a tendency to prejudge any move, political move, negotiations or otherwise ahead of time. that is a given, and that is a standard development. this time around, i think the fact that this particular secretary of state has shown a lot of commitment, six trips in six months, and a determination has reintroduced the one indefensible element for success which is a commitment from the one superpower that is necessary for this conflict. the other two components are palestinian politics and israeli politics. i think therein lies the major challenge. with the president palestinian make-up, the president clearly is engaged, he has faced some
resistance even at the levels of his executive committees and central committees, but also common rejection or lack of support in the media. there is the division between hamas and fatah and divisions between fatah itself and there are divisions within fatah and the other factions, so it is very hard to see something immediately responding to this initiative by the secretary of state. >> rose: okay. >> there is a real problem in that department. >> rose: i want to come back to all of this. some people raise this question. why is the secretary of state spending time on this seemingly intractable issue when you have got a war in syria and an egypt, you have got a government that you do not know where it is going and what its components
are? you know, one of the things that are going for this administration for secretary kerry and the president is that they understand how central this israeli-palestinian issue is to the united states. this issue is not the problems of egypt or syria or tunisia but it is the prism of pain through which arabs see america and we see that over the whole decade of information on how it is that this is the one that -- is the central one for arabs passing judgment, that's why, by the way in egypt or in syria you find both opposition to the government and the government itself both blaming each other for being backed by the united states, orin being called agents of the united states because the mistrust of the u.s. is not over what the u.s. does in the short term in egypt or syria or tunisia but really over this mistrust of american objectives that are tied to support for israel and oil. >> rose: go ahead. you had a regional conference
out west in which american general mathis former head of sitcom said. >> he said two things, the reason today that goes by when this israeli-palestinian issue doesn't pose a security problem for him in the middle east, and second, he said that the israeli settlements could lead to an apartheid relationship that the u.s. has to deal with. but the reality of it is, look, the united states says there shall be no light between us and israel, what does that mean? when they blame israel, which is almost always, they blame the united states. it is very difficult to separate this issue, and so, yes, it is a central issue for the united states in the middle east. it is -- there is sense the time is running out on the two-state solution. frankly the administration wouldn't know where to go if tomorrow it should conclude the two-state solution is no longer on the table. it doesn't even know where to
go. so given that, i think they have to be focused on it, and frankly, they don't have much control over what is happening in egypt or syria. yes, we can affect events on the margins. this is a sweeping revolutionary event÷g:the u.s. cannot really stop and it shouldn't be about america in any case. this is an issue where the u.s. can bear on but you can't do it halfheartedly if you do it halfheartedly and fail it is going to backfire on them. >> rose: just before moving on, but now dennis, do you agree in is the right thing for the american secretary of state to do at this time, notwithstanding other very ca very difficult is? >> well, i do, i might have a somewhat different explanation that shibley, i would focus more on the fact that given all of the upheaval that is in the region, and at a time when there is a relative stability between israelis and palestinians and it may not last where you may have a clams of the palestinian authority and you may have a vacuum at least on the west
bank, the last thing you want is for turmoil to be visited there aas well. it is bad must have that there can is all the turmoil that is taking place in the region, imagine what would happen if somehow you no longer had a palestinian authority or you had a third intifada, it doesn't mean we do this to the exclusion of the other issues. we try to affect the other issues because we have a stake in them but also agree that our capacity to affect the other issues is more limited than we might like it to be .. >> rose: ziad. >> another fact is this issue, as shibley said is the ultimate symbolic conflict in the world and it is exceptionally important to the arabs and muslims to have it resolved. to i think the mere fact of bringing the partisan negotiations, to buy time for the united states and for all the parties so that the other outstanding burning, present violent issues in several
countries in the region will be easier to handle if this at least there is this appearance or even more than appearance, real attempt at resolving this issue. >> rose: we clearly have seen something happen, israelis released some prisoners or announced they will release some prisoners i assume that is confidence building. what, therefore, will the arabs do to suggest confidence building? >> well, i think that the one thing that secretary kerry probably has been working on, i think, with hamas, in particular, has been a commitment not to stay at the table, but to forego going to the u.n., forego going to the international organizations. this is a step that the palestine wraps can take that can improve the environment and also reassure the israelis this is not just about an effort to deleo legitimate israel and isolate israel and keep it under
siege. >> it is important to understand under negotiation this sort of thing would not happen so that gives us the kind of time that the secretary would need to handle the region, in general. and it would reassure the israelis there is some seriousness on the part of the palestinians. >> rose: what else can you do to build confidence? >> well, you know, i have to tell you that i don't think you can do all that much. here is why. i think the mistrust is so deep in the short-term that short of something extraordinary, some agreement that is done in secret, a plan or something that came to rabin and arafat shaking hands it is very difficult to break, and i see that in the polling that i do among israelis and among arabs, we have a majority of people on both sides who don't believe the two state solution will ever happen. this is really in contrast with the years when dennis ross was dealing with it in the 1990s when people assumed it was coming. peace was around the corner, and, therefore, the betting, vetting was different and if you
hear the president of the united states go out to jerusalem and say that the chance of a peace is not more than 50-50, well if you are sitting there as a negotiator and think that have even a higher chance that negotiations would fail why would you make a compromise? so going back zero to the table is a huge step and very important and already changed perception a little bit on the israeli side and there has been a poll that shows maybe the majority would be supportive possibly of an agreement. but you need something more. the fact that you are going to a negotiating table is not going to be in and of itself confidence building measure and despite all the steps you might announce on prisoners or the u.n., you know that both camps have a lot of people sitting there who want to undermine it every day and w we have seen thm in the 18 nineties instead of building confidence every day it turned out, it gave opportunities to the opponent to derail it. so we need something big and unless the president and the secretary of state have something in the back of their pockets at some point when there is a stalemate they obviously
are going zero to have a tough road ahead. >> rose: do we know whether kerry is putting the big items on the table right at the beginning, whether 1967 borders plus or whether it is settlements? anybody? >> well, i think that, clearly we don't know exactly what the secretary is going to be doing. i think it is a fair assumption that the core issues of the conflict are going to be on the table meaning -- >> rose: at the beginning. >> at the beginning, security is going to be on the table. refugees in jerusalem will have to be on the table. all the issues of permanent status will have to be on the table. the real question is, how do you get at that? because obviously even if you have a certain understanding on the basis of negotiations, there still are going to be very different perceptions between the two sides about how they approach them, the israelis will want to focus on having their security needs addressed before they really address the territorial questions. the pal sinians will want to know that the border is going to be addressed before they
necessarily deal with the israelis on the security so how you create an anti-to talk about these issues i think is very important. i would say one other thing. i agree with sthibly that there is an shibley that there is an environment called disbelief, not mistrust but disbelief in the context this is operationing and it is very important to demonstrate something is different this time. >> rose: right. >> so people who are looking at what is the 20th year of oslo say i have seen this movie before, why should i take it seriously this time? and that is a reason to have some things change on the ground, that is a reason not to say, look, that you are trying to change atmosphere in and of itself but you do need to have each side taking stems that begin to build some momentum in addition to being able to show that there is going to be some progress soon. otherwise, you are going to have public whose say why should i think that anything, it is anything different the this time? >> okay. yes. go ahead. >> yes.
i think this is an exceptionally important point, frankly, and it has to do with changing the fact of life as they exist today in palestine. there are economic problems, institutional problems, governance problems, all of which affect the day to day life of the individual palestinian. if during the period of negotiations and right at the outset of negotiations there is no palpable improvement in the quality of hive and the quality of governance in palestine, then the public will not be interested and will quickly abandon this new venture. so i think the secretary himself, i know for a fact, that he is aware of this point, and one of the things that they are trying to do is to have an economic package. >> rose: right. >> -- introduced right at the outset which would have an impact that would enhance the possibility as dennis has been mentioned so that people will buy into it.
and we will see if this is also done well, because it has the potential, frankly, if things don't work out well, for the public to be quickly disenfranchised if they see -- a getting a disproportionate advantage out of what is going to come, and while they still are unable to buy shoes for their kids. >> rose: there is also this. i am told that general al has spoken to the israeli security issue, who was a general in afghanistan retired from the army is involved; is that right, dennis, do you know? >> he is involved, yes, and i think by the way it is focusing, he is focusing with the israelis but i suspect at some point they will be addressing the palestinians as well. so i think this point of trying to create an environment where you are able to demonstrate that something is different this time is a key to, in a sense, creating more political space for each leader to take a leap. it is very hard for leaders to
take a leap when the public doesn't believe. >> rose: is there a partner as is often said for the israelis to negotiate with when you look at the split within the palestinian community, not to suggest israelis don't have splits within their own political community as well? >> yes, you can ask the question about both sides. there are even numbers of netanyahu's government that wants a, doesn't want a two state solution and on the palestinian side you have a division, the big question is hamas, what do you do about hamas, obviously at some point they can, you know, torpedo the whole thing or you are going to have to bring them in. that has been a debate that is on going. >> rose: the initial effort is try to torpedo it verbally? >> yes. and i think public opinion is, at this point, somewhat with them, because i think people have a disbelief, they don't believe this is going to happen, but the theory behind, the theory behind all of this, i think is not unreasonable, i can give you a really interesting story which is probably where abu has hope, this is the story
of a singer, palestinian singer who ran for the arab idol in music, it is one of the most popular shows. >> rose: yes, yes. >> so what does hamas say first of all? he shouldn't be doing it. why? because, you know, if you look at these young women who are sleeveless and of course singing is not particularly, quote, respectable, and so they opposed it, and wha what happens when this guy got on? he created so much nationalism and people are so proud of him and the arab world are supporting him and he is stinging palestinian songs and guess what? hamas leaders, the hamas leaders say he is good and helping the palestinian cause, that is what they hope, the theory is that obviously if you have something too good to offer the palestinians people will come. i don't know that that is, you know -- that is likely to happen, at some point there is going to have to be a mechanism of communicating with hamas, maybe not early, but if i am an israeli and going to make final
status concessions i want to make sure i am making a deal with a broader palestinian politic so there is some incentive down the road about trying to bring them in. >> dennis anyway to tie the settlement movement to a peace process? >> well, i think there is a real important question, obviously here, because you have to look at this from a couple of different standpoints. from an israeli standpoint i think the assumption has been if you are able to produce an agreement, that agreement is going to have the settlement blocks in it or it is going to have blocks in it. >> rose: right. >> the exact size of those blocks is what you have to negotiate. now when we were back at camp david originally we were focused on blocks that would allow you to absorb about 80 percent of the settlers. now from that standpoint, you could bring, in a sense, the vast majority of the settlers al with you because 80 percent of the settlers would be accommodated in those blocks and i think ultimately that is the way it is going to have to
happen. i do think there is probably a question of how you try to socialize, how you communicate, you know, there are those israelis who say if you actually spend the time talking to the settlers this is also something that can be done but i think this is one of those issues that you have a model in mind, you have an objective in mind, and we shouldn't assume it is going to necessarily be easy. >> rose: go ahead, ziad. >> well, i think the issues themselves, all of the final status issues and the intermediate issues have been discussed thoroughly for decades. nobody is going to be introducing any new analysis or suggestion. what could change is political reality, political support that alliance itself with or without a certain attitude towards negotiations. and i think that is why if you want to discuss border issues now or final status issues today, you are not going to get anywhere at all, because the political reality both in
palestine and israel does not allow it. but if the negotiations start and improvements on the ground start, if relations between the palestinians and israelis take a more benign course than it has, then there will be an, a realignment of political forces both within israel and palestine and between the palestinians and israelis would could make negotiations about serious issues down down the road more realistic. the fear is this is does not happen then we would have used the biggest gun of all which is total commitment of the united states and end up with something less than successful, which could open unpleasant possibilities. >> rose: i don't have much confidence that. >> i don't have much confidence that left to their own twice it is israeli and palestinians with some confidence building measures that ca can buy them te are going to transform the process expects of an agreement. i think that is not going to happen. the mistrust is so deep, the disbelief is so deep, they are
so far apart on critical issues, including not by the way just borders but the station of the israeli forces in the jordan valley which is a huge issue in the conversation. >> rose: right. >> so i think if the administration is hoping that left to their own devices with a little bit of guidance here and there they are going to reach an agreement nine months from now, i think that is an illusion. i think there has got to be some new element introduced, whether -- like an american plan at some point. i understand why that administration is going to not reveal its hand. >> it shouldn't because the minute you say i have a plan in the back of my mind then you reduce the incentive for the parties to do something until -- or they think that, you know, why should i do it since the administration is not going to do that. so the administration has to keep its cards to its chest. they are and i think kerry operates that way. but i don't know that they have or they don't have, but i think if they are assuming that based on what we have seen back in the 19 nineties or since the 19
nineties in isn't a prospect .. that the two of them alone, given their politics, given where they are, given where the public opinion is, there isn't a prospect that their chance of agreement will be transformed simply by small measures lie economic progress or not going to the u.n. >> rose: dennis you are in the process of writing a book about the history of these negotiations and casting it forward as well, so i mean, suppose, and i am sure you do, have an opportunity to weigh in, what are the lessons of the past that ought to be applicable to these negotiations now? >> well, i think there are several leverages that stand out. one thing you have to create an environment where outside the negotiations you are creating political space for leaders to make decisions. there is a relationship between what is happening on the ground and what happens in the negotiations. one of the mistakes we made in
the past was we could treat the table as if it was something like a laboratory, completely isolated and divorced from everything that was going on around it. that simply isn't the case because political leader are going to be affected by the context in which they are operating. so it is a fact, i think, and a lesson from the past that you really do need to change the realities on the ground because that can reinforce what you are trying to do at the table. it is not a substitute for the decisions that have to be made, but it can make it easier to make those decisions. a second point. the u.s. does have to play an active role but we have to play an active role that gives the two sides a chance to explore the possibilities and then come to us and make the request to us, to make the bridging proposals. at the end of the day the united states will have to make bridging proposals because it will be very hard on their own to come to an understanding, if they could do it on their own they would have done it already. but the point is, again, pick the moments, make sure they are the right moments, make your own judgment about where each side
is, and make your own judgment about what is the essence of what they need and there is a difference between what they need and what they want. have enough of a feel for where they are in terms of both the needs and the wants so that when the point comes for us to be offering what is a proposal, we have done it both at the right time and we have taken account of the distinction between needs and wants. >> rose: are you suggesting that there should not be an american plan but there should be always the opportunity to make bridging proposals when the parties come to the united states? in other words -- it should not be an american plan but an israeli-palestinian plan in which the united states was able to somehow deal to where the conflict seems impossible? >> if we were to prepare a plan that doesn't fit what the two side in the end are going to be able to do we will put something on the table they reject. it gets to the point that ziad was making before, given the disbelief, the last thing we want to do is produce another
failure. >> rose: yes. >> that will simply convince everybody that this can never happen. we can't afford that to be the case. by the same token i think we have to -- we have to be prepared, we have to get a sense from them as i said of what they can do, what they can't do. and, again, w we don't want to rush in with the american way to fix this because we are going to find the earlier we rush in the more they resist it on the grounds they haven't exhausted themselves judgment about what they can do and what they can't do and one other point. this is the kind of issue where if it looks like it was too easy and i don't think we have to worry about that, if it looks like it is too easy each side will feel like they could have held out and gotten more. so you have to have a process where you draw this out. of course there is a balance, because you don't have forever but on the other hand, you can't rush to it, you can't force this before the moment is right. i have often said this diplomacy, you know, timing is everything and in real estate, you say location, location,
location. in diplomacy, timing is the key. knowing when the moment is right and at that moment then you have to act. >> rose: ziad, speak about the arab league and how they may be involved and how they can be relevant. >> well, i think the most relevant party, frankly, is the united states. it is the indispensable partner, and it also is a strategic partner of israel, and the palestinians knowing both of these facts still go to the united states and understand that they need the united states. they understand that they are not the strategic allies of the united states. the arab leagues and other entities are quite helpful in more than one sense. most importantly i would say is that they are needed to give cover for the palestinian leadership for any compromise. >> rose: yes. >> and to give legitimacy for any deal, especially at this point in time where the palestinian leadership is weakened and the arab world is in turmoil. it is very important to have that cover.
secondly, the arabs have actually come up with a plan, come up with a plan which made some sense some ten years ago called the arab initiative, arab peace initiative, and basically it is a trade-off for normation of relations with all of the arab world, 22 countries, with israel, with an understanding of an agreement on the basis of the 67 borders. this is a framework that still is applicable, and is of use. it is not clearly -- it already has been changed once and it may change again, but a dimension of support from the arabs, arab league, in particular, to the palestinians would be a force of good as would be a serious political conversation in israel, where the forces that very boldly say there is no two state solution and we are never accept it and sit in the highest positions of government also answer to a wilder constituency and have a political force emerge in israel that is not
challenged by the party in office at the present. >> rose: two things. >> two things. first, i agree the u.s. is a central player. everybody freeze, no question about that. but the there are a lot of parts that are still relevant and the europeans have just made themselves relevant by saying, yes to israel and no to occupation by taking these stems against the settlements, that undoubtedly influenced both the israel i are and the palestinian calculations. so, yes, there are still parties that are relevant. on the arab side i think the arab side is relevant and i think frankly if you look at the israeli calculations, they obviously want the israeli-palestinian issue if it is resolved to lead to broader peace. they are worried about the uncertainty in the arab world and so you have a coalition where still the governments that are in power today are prepared to operate on the basis of making peace 35 is a peace between israel and the palestinians and second, if that
doesn't happen, if this issue flares up, the israeli-palestinian war flares up between hamas and israel and collapse of the palestinian authority, every faction in the arab world, it is not going to resolve what is happening in egypt or jordan or syria but you can bet that every fact hundred is going to use the israel issue as the issue to compete over this issue, so you have to take it out of the -- from the israeli point of view i don't think there is any question that bringing in the arabs as an incentive to bless an agreement but also to provide, you know .. a broader strategic benefit i think is a big thing. >> swells economic proposals and everything else. does change in the arab world, whether egypt, tunisia or libya and especially egypt and syria, have an impact on these negotiations? >> yes, it does. just take what happened in egypt for now. you know, where the muslim brotherhood essentially was overthrown by the military
and you have a different regime. if, hamas instantly, hamas had been empowered and not on the defensive they may be more prepared time to give time to mess sin because they don't know where to go with the new regime in egypt is uncomfortable, so that is one obvious example. second, i think whatever happens in egypt, there is no going back to the number rec days and the relationship between egypt and israel so i see rails have every incentive to revalidate that relationship with egypt. at some point they are desperate for a close relationship because that is part of their regional security strategy. >> rose: i will leave you with the last question. do we need the secretary of state to be driving this, you know, with the president standing by? >> i think the key is something you put your finger on. a, there has to be a manifestation of american engagement and political commitment. b, it doesn't have to be the president in the lead role. if you look at who was most
successful historically, presidents didn't play the main role, it was secretary kissinger rather than president -- >> baker rather than president bush. it is true that president carter produced the egyptian israeli peace treaty and largely him. >> rose: right. >> but there never -- there is not one model here. i think the key is to be certain that you have a manifestation of the american commitment, and i think right now the obama administration, secretary kerry manifests that, there will be moments inevitably he will want to call upon the president but the president can remain in the background and we have seen secretaries do this before and the secretary can car ray the main burden. you can have an on stroi and have a negotiator, because secretary kerry has invested himself so much now there is an expectation he will continue to do it. he can have a negotiator and the negotiator can play a major role, but i think when it comes to the point where decisions
have to be made, you are going to have to bring the secretary into it and the one thing history shows for sure, we will almost certainly have to make certain assurances to both sides and that inevitably will involve the president's voice. >> rose: thank you very much, dennis, thank you, ziad, thank you, shibley, back in a moment. stay with us. >> rose: bruno and thomas middelhoff are here, they just announce add partnership to perform a private media cane focused on china, it is called bt cap capital, wu is the founder of sun media group and one of china's mogul groups in social media, middelhoff is is a former ceo, include random house publishing and radio and bmg music, i am pleased to have them here in our continuing interest in things that are happening in china and especially the relationship with the global economy and with the united states, and i also take pleasure in these tw 22 men i have knownr
a while so it is good to see you both. >> as it is ours. thank you for having us. >> rose: so how di did this happen? >> well, we have known each other for a very long time, for over a decade. >> rose: yes. >> we always talk about doing something together. now it is the time. >> rose: okay. what are you going to do, tom? >> we are going to put our efforts together and we are creating one of the leading media companies focused on china but with global and international outreach. we believe in the future of social weed in china. >> rose: right. >> the need for content, and what we are thinking even more alternative paths. >> rose: so is it basically an investment firm that is going to invest in media? >> no, it is a company, a portfolio, a broad portfolio, which will focus on media and which is, on the other hand, focused on alternative -- >> rose: and you are in operation now and you will be in china and you will be in europe or are you both going to be in china or how is this going to work? >> well, globally.
>> we are probably. we have offices, key offices already in seven, eight major cities. >> rose: including new york? >> new york, beijing, hong kong. we already have three or four offices here just in new york and the try state area, so paris, london, berlin, and the company is fully operational, every unit is already profitable. or on the way to be possible so it is growing and double digit. >> rose: okay. my interest here, as you know, is what is happening in china too. so where is -- and what do we make of the new president, the new standing committee? and their commitments? >> i think we have a fantastic new standing committee, i think we have, you know, very practical and a wonderful president. i think, you know, the problem with china is things happen, but they have to happen slowly but
surely, step by step. being a president is, you know --, you know, i think he is in the most important position to make sure the companies stay on course, the country stays on course and now going too much out of the regular route, routine, either way, i think -- he will out perform everybody's expectations. >> rose: well, speaking of out performing what is the chinese my going to do? >> well, i think, the chinese economy going to do? >> i think we have had tremendous growth for the last 30 odd years. >> rose: no doubt about that. yes but also now it is seven plus percent. >> yes. it is part of the growth. i think it is time now for us to adjust our investment focus from infrastructure and export oriented. >> rose: right. >> -- economy to more internal consumption. >> meeting domestic demand.
>> domestic demand. >> rose: but that is part of your plan. >> correct. and i think we will see some very solid results. >> rose: isn't there a loosening sort of in terms of state capitalism so that it will be easier to compete with the state? >> i personally hope that this will become a very -- >> rose: haven't seen it yet but hope it will happen? >> right. actually in the last ten years i think we got a little confused because the direction shifted a little bit. we went from, you know, a kind of market oriented economy to a little bit state owned companies becoming bigger and bigger but i hope to see more competition and more privatization in the years to come. >> rose: and is there expectation there too? >> a great deal. >> rose: tell me how you see china, and how do you see markets around the world today? >> for me, it is fantastic market with tremendous upside. i remember a discussion with two of my sons a couple of weeks ago
and he said, dad, isn't it all about silicon valley? and i said if i were at your age, i would go to shanghai. >> rose: would you really? >> i would. because when you are seeing especially in mobile, the social media, and all of these young enter pea niewrz, entrepreneurs in china trying to start their own business and what we learned during the last couple of years is the infrastructure is there, broadband, mobile, and so on. what we are needing are content. >> rose: right. >> and i he this is such a huge market and opportunity that i am thinking we are right on the spot with our approach which we announced today. >> rose: are you satisfied that on the part of the chinese government and others, a there is rule of law and respect for private property and respect for
copyright? >> yes. this is what you are always getting when you are discussing with media executives. >> rose: right. >> i remember when we started the first time in 2000, at that time, i was responsible for governance. this is what i always heard. yes, but looking back, what kind of values we could have created in the early stage in 2000, in perspective of today is incredible. yes. so, and of course when you are in media you have to take care of ip and so on but in is possible. and this is always such a defensive argument to say it is too complicated to get access into china. you know, we are cooperating with the leading digital learning and education company worldwide, which is fully operational joint venture in china. >> rose: speak to the question of intellectual property rights
in china. >> yes. >> rose: you are in business of media. >> yes. well, i think we are always challenged by issues of piracy. >> rose: right. >> but i think it came to a point somewhere two or three years ago that we -- the ip owners china and the government. >> rose: right. >> >> -- mutually came to consent unless we stop the piracy our own creativity will be hurt, so i think the last -- and we also had to raise the stake of the marketplace, so there is profit to be made by the creative industry. i think what you saw in the last few years, last two or three years, you see at least in the area of video, the piracy. >> rose: right. >> -- the impact of piracy has greatly minimized, even though you can still pick up, you know, pirated dvds on the street or whatever, but the growth of the
box office, the growth of regular viewing on digital tv has far out paced. >> rose: is china the biggest market for movies in the world? >> i it is not yet. this year we are at $3.7 billion in box office, number 2 in the world. >> rose: mainly chinese movies or a combination of chinese and american and europe and latin-american? >> it is interesting. last year, we had 2.6 billion, it was 70 percent foreign, mainly united states, u.s. movies. >> rose: action adventure and all of that? >> action, adventure, 30 percent domestic, this year is completely changed. this year, we have 70 percent domestic, 30 percent all the rest of the world combined, including ironman and man of steel and all of that. >> rose: you are in the movie business. >> yes. >> what kind of movies do you make? >> we are, thomas and i together
now, we are a, making english movies that go for awards, and we finance and participate in, and coproduce, for example, grace of monaco, and we have three movies in canseco,cannes competition and out of the finals .. and hopefully we will have at least one, hopefully, in the big awards, the academy awards that will come, and we are also, we also make a lot of investment, and development and english, global commercial action movies, he is the -- fast and fur you series. so on and so forth. but recently, we also start investing in chinese language movies, so we have actually, number one box office hit for this year, last year in 2,011, all with our company now. >> rose: you mentioned silicon
valley. can china develop its over silicon valley? >> i am thinking so, and -- >> rose: go ahead. >> you asked earlier the box office revenues. in 2017, china will pass the united states, an amazing message, i am thinking. the thing is happening in mobile. the same is happening in -- i think. >> rose: ecommerce. >> ecommerce, mobile. 37 billion in china, revenues. so i think it is only a question of time that you will have centers like the silicon valley in asia. i spoke just this morning with bruno about this, yes, and of course you can participate in this, yes, but always the or western perspective to say, okay, it is an ip issue and is this really coming through and you question now it is not just ten percent growth, but this
means something, not for china. this means something much more for export oriented countries like germany. >> rose: meaning what is what does it mean for them? >> yes. it means less demand, lesser demand. >> rose: for german product because they are buying the products in china? >> yes when you are seeing german courts, china is by far the biggest market for german cars. >> rose: right. >> and, of course, if you are having a problem in china then you are having a problem in your own country. yes, but even when you are seeing the numbers, i am thinking german cars, it is about 11.7 billion in china and relative to this in germany, 2-point something. >> rose: so bloom berry is blocked this china? >> for the time being, yes. >> rose: google is not -- has had difficulties with the chinese government as you know.
what is the status of all of that? doesn't that have to go away and you have respect for the free flow of ideas before you can achieve all of your potential? >> i am thinking in due course, a lot of things are going to change, but in the meantime, in the meantime china still has its own, what we call social stability that the government tries to defend. >> rose: rural, urban -- >> rural-urban. >> yes. china is in the phase of going through a major social transformation. no matter what people actually do have access to actually all kind of information. and i agree transparency will bring, you know, better understanding amongst the people, but it is going to take time. it is going to take time for the world to understand, china it is going to take time for ordinary
chinese citizen to be able to better comprehend all the information. so i think in the next five to ten years, we will see the situation becoming more and more integrated with the rest of the world's information flow. >> rose: after burlt man's what did you do? >> the first thing i did was i became to be partner of investacorp which is an alternative asset management company with roots, and i was responsible for the private equity business in europe, and during that time, i became let's say the task to become the chairman of the supervisory board of kasha at that time which was the leading department store mail order business and later on i became the ceo of this company. >> rose: and was leaving burlt man hard for you? you had been
the rising star there and the prince of -- >> this was a wonderful time at burlt man. it was very much about principal questions and as tough da. >> yes and going public and listing and so on. and i think it was a tough decision for all of us, but looking back, it was the right decision for me, because i am thinking that my strategy fit was right and to continue and to work on something of which you are not really convinced, and that you are thinking this is maybe not the right thing for the company, for the employees, even not for the shareholders, i think as ceo it is better to leave. >> rose: how do you see europe today? >> it is very much from an american perspective about the euro and what is happening in germany. i think in the end, there is no alternative to the euro, yes,
and i think that there was a huge hype about the question of what could happen with greece and italy and spain and portugal and so on, but i think in the end, there is just one thing, and even by a german perspective, we have to continue with the euro currency. this is so important. >> rose: do you need a political union as well? >> what we are needing is financial over -- you know, there is no minister of finance. we have everything in the european commission, but we have independent acting governments, financially, so, of course, we need something which is -- that you can say is administered and over seen and so on. we are clearly on the way, even for the european banks now, yes, for the european central bank and i think the situation will
be much better and better under control if we are having the right tools to manage, let me say, our financial system. >> rose: bruno, what do you worry about? tell me what causes you to say, i am optimistic but sometimes i wonder if my optimism is justified? >> well, i worry about the balance between the chinese general public's expectation of social reform, between their expectations and the actual speed that i think society shall be moved forward. >> rose: you are saying that society at large may have a higher expectation than the government can deliver and that might create enormous tension between the two? >> yes. not necessary what the government can deliver. it could also be what is right for the government to pace the social progress and development.
i think any hasty and, you know, movement by both sides would probably create imbalance. >> rose: is shaming different from tao? >> i think every president has done, in the last 30, 40, 50 years, i think every president has done his job. i think -- i really think that ping is a man of great vision, of great practicality. i think he will -- he doesn't talk as much but i think he will definitely out perform any expectations. >> rose: there is always corruption issues that come up. you have had that in the highly publicized cases. >> right. >> rose: that is, in factness onef the responsibilities of a guest on this program, he is in charge of corruption there. >> absolutely. >> rose: and a member of the standing committee. >> yes. >> rose: go ahead. >> the fact that you are even now hearing about so much
corruption cases and it is becoming more transparent, seeing several members of the politburo taken down because of corruption issues -- >> rose: right. >> -- is sheer proof china has made a lot of progress and we have a lot of confidence in him because he understands truly the system and he has the determination and guts to -- >> rose: to give him the hardest time. >> yes. and he is the professional firefighter. that is what his destiny is. >> rose: and what is going to happen to some of those who have been highly publicized arrests and lose their place in the chinese hierarchy? >> you mean like -- >> rose: like bushel lie. >> one of the things we will see, more so under president shi, under this current administration, you will see more and more respect to the law itself so everything will be the
processed in accordance with law, with proof, with, you know, the right to habeas corpus and has to go through due process. >> rose: ali baba is a huge company now, isn't it? >> ali baba is a fantastic company, china as you know last year had about, ecommerce of 2 trillion rnb. >> rose: 2 trillion rnb which is how many dollars. >> that is about, close to 350 billion u.s. dollars. >> rose: in ecommerce? >> yes. this is a giant portion of chinese retail so there is huge room to grow, particularly for video based commerce. >> rose:, you know, if you are a young person today, it is just awfully enticing isn't it? when you see the numbers? >> it is bigger in china. >> rose: yes. >> tell me this, does bt capital mean bruno and tom? >> bruno and thomas, correct.
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